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Ethanol: The Challenge (Part 2 of 2)

Prices at the gas pumps have jumped in recent days and many state officials are now looking toward ethanol. The corn-based additive promises everything from cleaner air to job creation. New state assistance programs now provide money for building ethanol plants. The state also offers tax incentives once the refineries are producing. But many challenges for ethanol lay ahead. Previous efforts to manufacture ethanol have failed and now environmentalists and some researchers warn against its use. ideastream's Mike West has this report.

Wednesday, August 27, 2003 at 11:50 am

Agricultural corporations, farmers and corn belt politicians are doing everything they can to boost the use of ethanol. It's already in about half of all gasoline sold in Ohio. Passage of the current federal energy bill would double that amount by replacing it as a mandatory gasoline additive. But so far Ohio has missed out on the ethanol market. It's the second largest consumer of the corn-based alcohol, but the state doesn't have a single ethanol plant. Two years ago the latest effort to build one failed. Lynn Bergman is the president of Northwest Ethanol. He wanted to open a plant in northwest Ohio but couldn't find enough investors.

Lynn Bergman: I think one of the problems is that we were trying to build a plant that was too small. It sounds just backwards of what you would really think and we did have a little difficulty raising the money.

Bergman is now raising money for a second effort. This time the state will help pay for construction as well as job creation tax credits. The timing is good because the latest energy bill requires ethanol to be used in gasoline instead of MTBE, which may contaminate ground water.

Lynn Bergman: We think that this will provide lucrative return to private investors. Obviously it is a little more risky because it is a start-up business. But it's not something that's new, there are other people out there doing it. Were pretty encouraged that this thing is going to be able to come together.

The state's last working ethanol facility went broke in the early 90's. State officials say the southern Ohio plant was too far from the corn fields and depended on old technology. But they insist new ventures can succeed. Ten years later, it takes fewer workers to squeeze more ethanol out of an ear of corn. Since ethanol cannot be sent by pipeline, as is the case with oil, the state's geographic location is a plus. Ohio is the closest corn growing region to the eastern markets and would be shipped by way of truck or train. The anticipated spike in demand for ethanol also has the attention of opponents.

Bryan Clark: What bothers me is that the senate energy bill would shield ethanol producers and oil refinery producers from any future liability if it turns out that ethanol really does have some significant health risks. That concerns me.

Bryan Clark is a conservation coordinator for the Ohio chapter of the Sierra Club.

Bryan Clark: And it does concern me that were using a cookie cutter one-size-fits-all approach on this issue by enacting a national mandate for this fuel source when there is still some study that needs to be done to determine the impact on increased ethanol use on urban air quality, on ground water quality and the impact on our rural neighbors and they run into an increase in the number of ethanol plants here in Ohio.

The Sierra Club is not alone in its skepticism. Tad Patzek is the professor of Bio-Engineering at the University of California at Berkley. He conducted research on ethanol that drew the controversial conclusion that making ethanol consumes more energy than it provides.

Tad Patzek: It takes a lot of energy, fossil energy to produce corn. You have to use very energy intensive fertilizers. You have to use fuel to move machinery and to dry corn and transport it and so that's one cost in fossil fuel. And then you get your corn, which you have to smash and do things to extract starch and then you have to brew beer and then you have to distill and dehydrate the beer to get the ethanol.

Don Clark: He bases all his comments about the technology as it existed in 1979. I can tell you the technology has improved about a thousand fold.

Don Clark is the agriculture industry specialist for the Ohio Department of Development.

Don Clark: His comments have been refuted successfully by many, many scientists again and again, but for some reason this guy continues to get some press activity. It is a net energy savings. It certainly doesn't take more energy than it costs to get the product. If that was the case I certainly wouldn't be here.

But at least one researcher questions promoting any type of combustion fuel. Berkeley Professor Tad Patzek says conservation is the best long term answer.

Tad Patzek: For god sake, we have better car designs which could be introduced today without much thinking, and then in ten or fifteen years we would have replaced much of the cars with a better design and more efficient designs and therefore would have curtailed the consumption of fuel.

Another challenge for ethanol is that it is still more expensive. The wholesale cost is about a $1.15 a gallon compared to ninety cents for gasoline. But despite the cost and possible environmental risks. Ethanol is expected to rise as an alternative fuel. The big three auto makers already produce vehicles that run on 85% ethanol. According to triple a, about a million of them are already on the road. In Cleveland, Mike West, 90.3.

Ethanol has been considered a serious alternative for fuel. Read part one of our report on ethanol.

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